Oil giant Royal Dutch Shell has told its staff that it plans to make more than 3,000 job cuts.
According to a leaked memo to its staff from Shell's vice president of IT infrastructure Goh Swee Chen, the firm has been in talks with outsourcing outfits EDS, AT&T and T-systems, and said that contracts were expected to be inked in …

COMMENTS

I seem to remember...

Back in the old days, successful businesses grew by employing more people. Nowadays it seems that successful businesses cut jobs.

As for the meat of this revelation, well they will now have the "fun and games" that outsourcing brings and in 2 years time will start discovering how much more expensive it is to maintain the same level of services using outsourced IT than it was having an in-house IT department.

All those "quick 5 minute" jobs that will now require 6 month of specifications and contract negotiations...

"Hey, does anyone know what happened to those 2 CD I burnt that database onto?"

The no-speak spokesperson

"I can't confirm the number and I'm loath to comment on any number."

Which seems to be shell-speak for "thats is an extremely accurate number, where the hell did you get it from?". I left Shell after their previous cull, called OVA or Overhead Valuation Analysis. Anyone one could suggest ways of cutting the overheads. Comments such as "Get rid of him, he's useless and I could do his job in my spare time" were positively encouraged.

Proactive spin and damage control.

Well, they've got to have some justification for exponential pump price and profit curves. After all, some practices could result in future investigations and even criminal charges.

"Customer gouging? Devious manipulation of the oil market and generally lying our asses off? Definitely not! We fired every last employee below the mega-bonused C-level and the wild profitibility is the result!"

poor sods...

Having been outsourced to one of the likely candidate companies all I can say is my heart goes out to the people likely to be affected. Its not an experience that I'd wish on anyone. Its amazing how much isn't covered by TUPE so make sure you get legal advice from the start. Take redundancy if its offered - you will be much happier. And of equal importance , their customers are going to find their lives a lot harder too. No more 5 minute jobs or quick tweaks. Kiss that goodbye. .

EDS

I work in the offshore industry where we provide real time data for the grown-ups in aberdeen to see what is happening on the rig, not for Shell (but I have done). EDS have this tendency to tinker with things on a Friday afternoon, which inevitably breaks the link from us to our real-time centres. Obviously as soon as the data stops it's our fault, even if it's actually due to changes to the router, that EDS have made which "shouldn't have affected it", that we have absolutely no control over. Yeah thanks, we get a weekend of hassles from people due to something we can't do anything about and the person who made the changes swans off for their weekend off. We then have to battle with them to get the changes, which probably weren't all that important anyway, undone. I feel for my colleagues who do the same as I for Shell soon having to deal with EDS or the like

They're doomed

Eventually they'll discover what every other corporation that's taken this path during the past 8-10 years has already figured out - what ever engineering projects they were working on (IT or otherwise), once outsourced, will take at least three times as long and will require at least three time as many many man hours (read warm bodies) as the same projects would have required if they'd kept the project(s) in-house.

i.e., ultimately, a Net lo$$

You'd think after all this time they'd have bothered to at least look into the experiences of those who've trod this well worn path before them. But no! We're a high-falutin oil company, we don't need to pay any attention to others mistakes!

Sorry Royal Dutch Shell, I can't have any sympathy for you - you took the ID10T's solution on this one.

You Forget

The benefit of outsourcing is that it shows that senior management are doing something to cut costs, and focus on the core business. An it also means that a whole raft of people who know more about how the business runs that they do are lost, after all can't have an IT person knowing more about business than an accountant.

Oh I could go on forever about why outsourcing is such a bad idea, even if it is how I make my daily bread. Still, we can thank the lord boards and accountants are stupid and don't really have any idea of how their businesses make money, or work.

Gagh!

Some genius in the upper echelons of manglement at my employers has decided to outsource our helldesk, thereby enhancing shareholder value. To add insult to injury, they brought over some of the new helldesk operatives from India to the UK and the US to learn the ropes, and expected the soon-to-be-redundant to train their replacements!

We predict six months of chaos before:

o the manglement caves in, or

o we lose patience, burn the building down and retrain as lorry drivers

Quality support from Outsourced companies (via the support vendor)

Having worked for two major Unix Vendors in the last 9 years I can vouch for the other side of the coin, what its like picking up service calls from outsourced companies that have absolutley no clue at all and lean on the software vendors to get the jobs done.

In my experience the UK, US, Germans & French guys all get the job done to a fair degree and ring in to say "hey, found a bug" or "where's that patch" or "how do I do this complex thing" and OK, you get some occasional idiots who can't type "ls -l"

Comparing to the standard quality from many outsourcing outfits who ring in and have no Unix experience at all an yet argue the toss on some complex point despite having not got past Unix Fundamentals.

"But Sir, your OS crashed because you force unmounted root, which is not allowed. Resizing root is a complex thing to do and you cannot do it online" followed by the complete blank face (metaphorically) and the follow on response "I don't care about the root resizing now, why did your shitty OS crash, please fix the bug that causes OS crash and stop writing emails that cc my managers and make me look stupid despite the fact I've been told this 7 times"

Another common variation is :

"Hi, write me an action plan to be able to do x, y & z as we are incapable of reading a manual, our manager gave us no training budget so we don't know the basics of products we're proposed to be experts on and by the way, do this now or we manipulate things and ring the Account Manager and play the devil with you. By the way, customise the action plan to my particular needs as I am too stupid to take guidance emails. Please don't make syntax errors or I make it all your fault."

To help matters its always good having it explained to me in best Indian'glish possible. OK, I don't speak Indian either so hats off and all but this is a direct replacement for a UK or US Sys Admin afterall so some native skills are expected.

Of course, fairly spineless support managers @ the aforementioned Unix Vendors don't really help. I think the real picture of how awfull these outsourcing deals really are would be much more apparent if the Unix Vendors sent everyone of those style calls straight to their Professional Services Dept for a quote, leaving the supposed experts in hot water.

Is that fair ? Guess it depends if you view a service contract as a replacement for an Implementation specialist (PS) rather than a problem fixing service.

So Shell, outsource yourself to a greater or lesser degree and then please sneak someone inside the outsourced company, a spy so to speak and confirm for me that while it looks OK from the outside it's all actually held together with bits of string, bluetack, sellotape and some old chewing gum.

so wrong ?

...it's startling that here we are, many of us confessing to earning our a money by structuring or delivering outsourcing deals, yet largely acknowledging that this type of deal is wrong ethically, professionally, practically and technically.

...and yet, as one commenter put it, "Senior Management appear to be addressing costs". - and they plow on, learning nothing from repeated failure and pain of the effort.

We, the few charged with delivering these broken solutions, know full well that true costs with be far higher than than any saving shown on the bottom line.

But it's not a new story - but an old one with a technical twist.

I read somewhere, that the 1st thing you should, upon reaching a senior management type position - is to declare a 5 year strategy to do something or the other...doesn't matter what....but introduce it with a fanfare, fully confident in its success, knowing full well you and many other won't be around in 5 years time in any case - having been catapulted up the ladder by your wonderful strategy.

I, for one, welcome my new corporate overlord..

As a long term contractor who will stay here during the transition, I'm not particularly worried..

I'd like to clear up one popular misconception, though.. Outsourcing is different to offshoring, in that (for the most part) people who work for or contract to Shell the day before the outsourcing goes through will still have a job/contract the day after, only with a different company. There is some restructuring and job shifting, but employees (at least in the Netherlands) are being taken care of. I hear some other countries, with less employee protection, won't be so lucky. Overall there is a much reduced IT budget for 2008, which has additionally caused hiring to slow down, and people to seek employment elsewhere.

Most contractors in my area don't give a damn, as we're here for the money and the experience, and our knowledge can't be replaced overnight. If we feel our contracts are at risk or the work environment is less interesting or desirable, we will move to the next contract.. nobody need terminate us. :-)

A big problem comes largely with employees, who wanted to work for Shell and now feel betrayed. Many are leaving of their own free will, or joining other parts of the company whenever they have the opportunity. This is where the problem lies, because it is usually the most valuable employees who leave first.

Internally, most people think it's a bad idea to outsource core IT because it is in fact core business on the Exploration and Production side. It's just the higher-ups who want to seem proactive. Things will go smoothly for a while, until the new corporate overlords drive off enough good people, then in 5 years, the rest of the company will have had enough, and we'll in-source again... or (depending on the contracts) the divisions will start building up their own specialist IT teams well before then (leading again to fragmentation and incompatibility, which is what Global IT services were working to eliminate).

Shell's IT company/division is smart enough, at least, to keep some of the talent inside the company, but whether the division of labor between Shell and the new companies will keep inquiring minds satisfied enough to stick around is another question. On the bright side, some of the new firms might get fresh talent from the Shell people. :-)

Oh, for a New Gusher/Virgin Well.

"Internally, most people think it's a bad idea to outsource core IT because it is in fact core business on the Exploration and Production side. It's just the higher-ups who want to seem proactive."

I would agree that it is a bad idea, AC, but with no one higher-up with any new ideas, what else to do? Looking busy rearranging deck-chairs/training native proxies doesn't look so bad whenever there is nothing in the pipeline/the store cupboard is empty/the boss is compromised/the fiddle exposed/the natives are restless.

Question for "Welcome my new corporate overlord"

In response to "let me clear up the popular misconception"

Did you never notice the style of deal where an outsourcing giant will swallow up staff, run the operations for 6 months from the UK then claim that no money can be made so the work should be shipped oversea's to an army of waiting Engineers?

I'll say your right, on day 1 of the new deal most people will still be in the UK, just don't assume the same on day 180 or day 365.

Ah the joys

As someone who has been through the mill, albeit with a bank rather than an oil-giant, I can only too happily confirm the stories about what is lost of which foremost is the goodwill of the staff being sold on (or is that TUPE'd).

To make matters worse, IT was not even all outsourced to one company and so what little there was that did continue working soon became unusable as routine work on kit and normal lifetime upgrades became subject to a 'whose turn is it to make the bucks' fight.

After a couple of years we were all bought back with exactly the same justification used as when we were sold.